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How Lady Gaga's manager reinvented the celebrity game with social media

This article was taken from the June 2012 issue of Wired magazine. Be the first to read Wired's articles in print before they're posted online, and get your hands on loads of additional content bysubscribing online.

One afternoon in February, Tumblr president John Maloney called in to the Atom Factory, the Los Angeles offices of Troy Carter, Lady Gaga's manager. The offices -- still being built -- are all clean lines, dark wood and brushed marble, and shout of-the-moment hipness and wealth. Carter has a three-room first-floor suite with pop art and leather furniture. Huge televisions show basketball matches in every room.

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Lady Gaga costumes sit behind glass across one side of a room. It's every bit the mogul's lair, but Carter's doors are always open.

Except when they're not.

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Carter didn't greet his Tumblr guests in his personal space, but in the foyer. This wasn't a meeting that he needed, but he was intrigued by the platform. What Tumblr is doing is "magical", he said. Half a dozen of Carter's associates took notes while Carter, who is short and trim, lounged, his face dominated by thick-framed glasses.

Tumblr was paying calls in Los Angeles, Maloney said, as part of a "deep dive" into the entertainment business. It was time to educate Hollywood about what the new darling of the social web could do for its clients. In this case, however, it was Tumblr that was about to be schooled. For several years, Carter has been plotting a digital disruption of the music business and, by extension, the whole entertainment industry.

In addition to his offices in Los Angeles, which employ talent managers and communications and support staff, he has a team of nearly 20 engineers and executives in Palo Alto, working seven days a week developing something called the Backplane, a social-media platform that will allow celebrities to combine all the elements of their social-web presence. "Who've you got, celebrity-wise?"

She's really gravitated toward it." Jay-Z and Beyoncé posted the first photos of their baby on Tumblr, with a handwritten note. "They controlled it," Maloney said. "Much more classy than a magazine cover." Zooey Deschanel is on the service, too, he added, reblogging fan art once a week. "Wil Wheaton is also doing great things," Maloney said. The mention of a former Star Trek TV actor doesn't get much traction from Carter. Still, Tumblr had caught his eye. Lady Gaga has more than 22 million Twitter followers and 50 million Facebook friends -- possibly the largest digital footprint of anyone in the world. "We can't not be there," Carter said. "How are things with Little Monsters?" Maloney asked. "They're happening," Carter said.

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He's referring to Littlemonsters.com, the Gaga fan community powered by the Backplane. Carter was running the beta test. At that moment, Little Monsters had 50,000 members, but a million invitations were ready to be sent out to Lady Gaga fans who had registered online. Maloney's eyes widened. "The level of engagement must be spectacular," he said. "They're highly motivated fans," Carter replied. "This one isn't for the passive.

It's for the die-hard die-hard. We could go to Facebook for pure numbers. But give us 500,000 really engaged people, and the blast radius will be enormous."

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TomorrowVentures, the Backplane aims to transform how the entertainment industry interacts with consumers. Currently, Twitter, YouTube, Facebook and the other outposts of a celebrity's digital career are separate.

The Backplane aims to gather content and interaction into one hub, which could completely alter the economics of Hollywood: revenue that once flowed to corporations will flow to artists. "Up until this point, we've been data dumb," Carter says. "If a kid goes and buys a CD at Best Buy, we have no idea who the person is, how many times they listen to it, or anything like that. But we're building to the point where one day we're going to have access to all of the data. There will be a time where we'll be able to release music through the Backplane, where we'll be able to release music videos through there, we're going to be able to sell all our tickets through there. Over a period of time, we'll be able to <span class="s3">build that audience so they'll know exactly where to come."

Traditional structures aren't set up to challenge an artist with the resources and tech savvy of a Lady Gaga. "It's a classic innovator's dilemma," says Miles Beckett, co-creator and producer of hit YouTube series lonelygirl15 and now the CEO of EQAL, a company that "builds influencer networks around celebrities and brands". "If you have a huge organisation, even if the leaders want to change, it's very challenging to move in a different direction. There aren't open incentive structures to fund little business units. They're set up to take a couple of years developing a TV show. Every single component of that process, from the development team to the content team to the ad team, exists to make a product slowly, rather than,

'We're going to post a video Monday, and change it Wednesday, and the marketing department is going to have to respond quickly.'"

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The Backplane is among the most high-powered and heavily funded entertainment-based social-media ventures in the marketplace, and an exemplar of a movement sweeping the industry. Beckett and his collaborators have built a platform that allows celebrities to plug their existing brand into an online framework; he describes it as "a mini-Facebook built around a lifestyle brand". His clients can interact with their fans in a way that wasn't possible two years ago. "Most celebrity websites are Flash sites that don't even load on the iPad," he says. "They look pretty but don't build community."

Case in point: actress Alicia Silverstone. Her vegan-lifestyle site thekindlife.com, which has 47,000 registered users and averages more than 800,000 page views a month, is one of the web's most-viewed sites for vegan culture, according to EQAL. Those are hardly Gaga-sized numbers, but this type of interaction can work for celebrities at all levels. "It's helped me to connect with my fans and engage with them in a direct, meaningful way," Silverstone says.

Entrepreneurs such as Beckett and Carter know that change has arrived. The goal, Carter says, is to turn the Backplane into a one-stop hub for the entertainment community. He's in talks with actors, studios and sports teams. He adds that it will also be useful for vintage-car clubs and for Girl Scout troops, although perhaps less profitably. For now, though, he plans to use it as an exclusive place to sell concert tickets, music, videos and whatever other Lady Gaga products emerge. "She still has a deal with Universal Records," he says, "but there will come a time when she'll release music through her own site. It's not just going to be about sells. It's going to be about the streams coming through the site. For us, it's important to be able to identify who's listening to what. We want to own that data. We have to own that data."

Troy Carter's career is an unlikely and serendipitous success story. He grew up in a rough part of West Philadelphia, before moving to Los Angeles in 1988 as part of Will Smith's entourage. "I started off wanting to be a rapper and learned that I wasn't very good at it," he says. James Lassiter, Smith's manager, took Carter under his wing. Carter worked as Lassiter's assistant, as a runner on The Fresh Prince of Bel-Air, and carrying DJ Jazzy Jeff's records. He moved back to Philadelphia and started promoting concerts, and his shows were noticed by Sean Combs (then Puff Daddy), who gave Carter a job as an intern at his company Bad Boy Entertainment. Carter learned enough to start his own business, Erving Wonder Entertainment, in 1999. He worked in a windowless 240m2 office in a basement representing acts such as Eve, Floetry and Nelly.

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In 2003, Carter moved back to California to produce Eve's eponymous sitcom for the UPN network. A year later, he sold his firm to a larger company, The Sanctuary Group, which moved him to a glass office tower. He went from having fewer than 10 employees to having 60, and managing a huge talent roster. Almost immediately, Carter started looking to get out; it just didn't feel right. He longed, he says, to get back to "startup mode". Two years later he left, and a year after that he was declared bankrupt and started working from home. Around this time Carter's friend, music producer Vincent Herbert, introduced him to a singer Herbert had discovered on Myspace. He had brought a singer, called Lady Gaga, to LA to meet Carter.

In late 2010, Lady Gaga called Carter. She was on the Sony lot, where she'd just seen an advance screening of The Social Network. "Why don't we start one of those for my fans?" she asked. Gaga already had a huge social-media footprint -- she updated her own Twitter feed more or less daily, but Facebook and Twitter weren't really "moving the needle", as Carter puts it. The true Gaga enthusiasts were spending their time on independent sites such as Gaga Daily, Gaga News and Lady-gaga.net. There were about 30 of these around the world, in a number of languages. Carter considered these sites the core of the Lady Gaga empire. His staff communicated daily with the fans that ran them, sending out early warnings about tour dates and helping to dispel internet rumours.

Gaga occasionally visited the sites' messageboards to interact with users. "It's almost like having an underground network," Carter says. "There may come a day when you don't have the cover of Vanity Fair, or you may not be able to get on that big TV show. But it's important that you have that direct communication with that audience so they still know what you're doing."

Carter was well positioned to make this happen. He was a player in the worlds of R&B, hip-hop and pop, though no one in tech knew his name. But now they were coming to him for advice and financing. In the last couple of years, he'd been investing in Silicon Valley

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startups such as Turntable.fm and the URL-shortening service Bre.ad. "He's always trying to create value," says Shervin Pishevar, MD of Menlo Ventures, with whom Carter launched a $20 million (£12.7 million) "talent fund" last September. "Even with his investments, he's not trying to get advisory shares. It's awesome, he gets it." "He has one foot in the traditional music business and one foot in the Valley," says Michael Rapino, president of Live Nation Entertainment. "He's becoming a gatekeeper."

Carter's introduction to the tech world came from Matt Michelsen, a US hedge-fund manager. Michelsen had backed 90s giants including Yahoo! and Double-Click, and cofounded the trading firm UNX, but he dreamt of making the rounds in Hollywood. "It wasn't that I had done poorly," he says. "But it's an attractive endeavour to do movies and music."

A call from 50 Cent to Michelsen's wife Jenny was the way in. The rapper was calling to talk about investing in her computer eyewear company Gunner Optics. Jenny handed the phone to Michelsen, whom she thought would get on with the rapper. The pair immediately struck up a friendship that soon brought Michelsen to LA.

50 Cent set up some meetings. One of them was with Carter, who was interested in how technology would change entertainment. With Carter's help Lady Gaga had begun to explode on YouTube, Facebook and Twitter. Michelsen saw a chance:

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Carter had good social-media instincts, but was naïve about how digital actually worked. "You don't speak Google," Michelsen told Carter. But Carter wanted to learn. "Troy is a different beast,"

Michelsen says, "in that he understands what he's good at, and he builds a team around him who are the best in the world at what they do." Now Carter had a real digital insider, he went into listening mode.

Michelsen explained the tech universe this way: "The Valley is all about nuclear weapons.

Facebook, Twitter and Google are nuclear. And you should consider yourself and Lady Gaga detonators." Carter got the message. He told Michelsen: "I want to have a technology arms dealer in Silicon Valley." In 2009, Michelsen took Carter on a tour of northern California. They met senior figures at Google, Zynga and Facebook, and Ellen Siminoff, a founding executive at Yahoo! "It was more building relationships and seeing if there were any synergies,"

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Michelsen says. "It just blew my mind," Carter says. "It was like Revenge of the Nerds, and the nerds had won, permanently." There were plenty of synergies. Everyone wanted a piece of Lady Gaga, but not everyone could have one. "Lady Gaga doesn't go around holding up deodorant," Michelsen says. Zynga started a game-based community called GagaVille. Gaga made a commercial for the Google Chrome browser that debuted during Saturday Night Live. Carter's team collected more than 80,000 YouTube clips of fans' own versions of Gaga's song "Edge Of Glory".

A new era of online celebrity marketing was dawning. "The music industry is traditionally about selling music, selling music, selling music," Michelsen says. "We look at the world differently: how we can take our brand and how can we build companies and brands around it?" But Carter wanted more than just to navigate the world of digital entertainment marketing -- music was still the core of his business. So when Gaga asked him, essentially, to build her a social network, he was ready. He says: "My biggest frustration is the lack of scale in the music industry. The fact that no one has sold 100 million copies of an album is frustrating. When you sit down with Zynga and Google and they talk about billions of impressions, you think, music has way more of an emotional connection than technology, but we haven't cracked the code. No one has bridged that gap between music and technology yet." Carter was about to try.

The idea of an independently run Lady Gaga fan network now planted, Carter brought in his technology arms dealer. Ten years earlier, Michelsen had helped develop Palantir Technologies, an "open-source aerial mapping system" that ended up being used by the CIA and FBI as a key technology in fighting al-Qaeda. It reached a value of $2.5 billion. Michelsen persuaded two of that company's founders, Joe

Lonsdale and Alex Moore, to help him with the Backplane. "I'm a strong believer in building technology from the core," he says. They put a post on Lady Gaga's Facebook page that read "Gaga Seeks Geeks" early in 2011 and received thousands of CVs, including one from a Gaga superfan named Joey Primiani who happened to be the creator of Google's Cortex technology as the company's tech co-founder.

The Backplane team started bandying about the term "community cold fusion". "Cold fusion is this technology that's not supposed to be attained," Michelsen says, "and the same goes for authentic online community." He explains that large social movements -- political or cultural or religious -- revolve around their group identities first. The technologies that people use should enhance their lives, not dominate them. "People are not Twitterers or Facebookers," he says. "They're Deadheads. They're Christians. You have to create an identity for people within that authentic experience."

The project had been engaged; now Carter needed to sell it to the Valley. He and Michelsen sat down with potential investors such as Google Ventures and TomorrowVentures in early 2011 and got grilled. "We were stereotyped as we started talking to people," Carter says. "They thought we were out to build a website. Some of the VCs asked,

'What's the difference between what you guys are doing, and other companies?' I said: 'They're websites. They're blogs. We're building this with computer scientists with incredible track records.' They didn't ask how we were going to market it. They didn't ask about what artists we were signing up. All they wanted to know was what kind of system were we building, and what engineers were we hiring to build it? We had a lot of answers because we started off with a real engineering team. We just brought in our first marketing and communications person three weeks ago. The Backplane was built with engineering in mind."

Littlemonsters.com launched in February 2012 with a very limited membership. Nine months earlier, the Backplane had posted a launch page asking people to sign in with their Facebook Connect accounts. The first 1,000 people, along with a select few Lady Gaga community "tastemakers", got the first 1,000 invitations to the site. People who signed in on the first day found something vaguely similar to Pinterest or Reddit -- a wall of Lady Gaga fan art and photos that stretched as far as the page could scroll. Clicking on a piece of art would take a user to a fan profile page. There were also functions for private messaging, an area for listing tour dates and other Gaga appearances, and a button like a cross, which you could click on to see recent account activity. Fans also got their own Littlemonsters.com email address: suddenly, their online identity was inseparable from their love of Lady Gaga.

Lady Gaga called Carter on the site's launch day, wanting an access code. He told her to bide her time, that there were still bugs to be solved. The team sent out more invitations, raising the membership to about 50,000. Then, on February 10, "Mother Monster", a "25-year-old pop performance artist from New York", entered the fray. "She just went on and started communicating with fans," Carter says.

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Gaga liked the site, but had some suggestions. The profiles could be a little richer in detail, less generic. That was an easy fix. They needed a chat function. That was already in the works; the Backplane was using Google's translation software so people from all over the world could chat in one language. Mother Monster stayed in the community, exulting in the adoration. Now that she was in the mix, fans were suddenly posting pictures of themselves.

One of those fans was Laura Lyne, a journalism student in Dublin who had cofounded the fan site gaganews.com. She'd met Lady Gaga backstage at a concert in Ireland in 2010. Gaga said that she'd put her in touch with her management, and she kept her word. Now Lyne communicates with Gaga's people all the time. "When it's really busy, we get an email from them every day," she says. "I've heard of fan sites being in contact with management, but I've never heard of them being so involved. It makes you feel appreciated. It makes you feel like your work has gone towards something." Littlemonsters.com takes it to a completely different level, Lyne says. "Lady Gaga seems to go on on a regular basis. She's updating all the time. There's a love icon, and she's clicking that on things that stand out. A couple of weeks ago, she tweeted some fan art that she found on the site. It was an amazing thing that she would never have seen otherwise. The fans are getting this amazing opportunity. It's what makes it so unique." "Treating a fan online is no different to treating a fan outside a hotel," Carter says. "They're not expecting you to walk straight to your car. They want to take that picture, they want to feel that they know you. So when you come to somebody's profile, and you like a piece of their content, or you compliment them on something that you saw, they remember it." Community cold fusion: achieved.

On a gorgeous Thursday afternoon in February, Carter made his Hollywood rounds in his Fisker Karma. He parked at the Sunset Tower Hotel in West Hollywood, where he met Daniel Ek. The Spotify founder was just finishing a two-week round of meetings, along with DA Wallach, a young musician from the band Chester French who also works as Spotify's adviser and "ambassador" to the music industry. Carter had nothing specific to discuss with Ek, he said, but Spotify is a "friend of the family". "It's like a cultural clash," Carter told Ek and Wallach over salads and iced tea. "You guys spend it with the right people on a day-to-day level." "We want to be the most artist-friendly company we can be," Ek said. "We want to meet as many people as we can." The three friends spent 15 minutes swapping playlists on their iPhones. Ek headed to the airport and Carter to the Ritz Carlton in Marina del Rey to "connect" with Naveen Jain, founder of the World Innovation Institute. Jain spent most of that meeting talking about ideas for educational software. "You get a bit of brain drain doing the same things with the same people day after day," Carter said later. "I put those meetings in my schedule just to get a different perspective."

Finally, he went to Interscope Records for old-school music business. There was a meeting to plan the strategy of one of his clients for the Coachella music festival in April. There were nearly 20 people in the room, but Carter was calling the shots. "We've got the song of the summer, hands down," he said. "You have the song every summer," said an Interscope executive. "We try," Carter said. After that, it was down a couple of floors in the lift, then a walk through the Interscope offices, which seemed dark and shabby after the <span class="s4">digital palaces that Carter visits, and is building, every day. "It's like getting a tour of a dinosaur museum," he said with a wink, before walking into another office, where he'd be discussing Lady Gaga's finances -- and shutting the door behind him.